Does the Stock Market Close On Weekends? [Here’s Why]

Looking at the life of stock brokers one is often left wondering if they’re always on their toes working and if the stock market is always up and running even on weekends. But is that the case? Here’s the answer:

The Stock Market stays closed on the weekends. It is for the brokers and investment bankers to decide on their investments and to wisely think over critical decisions in case a crisis befalls the market. 

In this article, I will discuss why stock markets are closed on weekends and all the necessary information related to stock market holidays.

Stay tuned as I delve over this in detail.

Is the Stock Market Open on Weekends?

The stock market is closed over the weekend. The New York Stock Exchange and the Nasdaq Stock Market are both open for regular trading from 9:30 AM to 4:00 PM Eastern time, Monday through Friday only.

In addition to being closed on the majority of federal holidays, trading opportunities for investors are further constrained.

However, since 1985, investors have had access to pre-market and after-hours trading sessions, which are open on all regular trading days from 4:00 p.m. to 8:00 p.m. Eastern time.

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Why Are Stock Markets Closed On Weekends?

There are a few causes for this, even though nearly all modern stock trades are handled by electronic communication networks (ECNs) that can operate around the clock. 

These include:

#1 Weekend Closures are Customary for the Stock Market

Stock markets are closed on the weekends for “practical” reasons because the floor traders who used to handle trades cannot work around the clock.

Professional money managers were the organizations that verified the bid price, ask price, and quantity between buyer and seller prior to the widespread adoption of technology to handle trades. 

These professionals were able to unwind over the weekend.

The commotion of hundreds of floor traders swarming around a screen at the New York Stock Exchange, however, is mostly symbolic and unnecessary because contemporary stock trades are handled by ECNs now.

There is no reason why the stock market could not be open around the clock today in terms of the functional practicality of buying and selling stock.

#2 The Weekend Offers a Required Buffer

The best justification for closing the stock market on weekends in modern times is to prevent widespread panic.

The government can work with corporate entities to help stop the bleeding before the financial markets enter a full-scale depression in the event of a national crisis that has the potential to destroy the stock market.

The discussion of stop-gap and bailout scenarios takes place over the weekend. For instance, at the height of the 2008 financial crisis, the government worked on the financial system over the weekends. 

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Why Do Some People Have Weekend Trading Rights?

There are a number of reasons why people might be trading on the weekends.

• Due to time zone differences, foreign exchange markets are open around the clock in various locations between the hours of 5:00 PM Eastern time on Sunday and 4:00 PM Eastern time on Friday. 
• This is because they trade forex. Forex, however, is not a component of the stock market, to be precise.
• They are trading cryptocurrencies, which can be done around the clock and from any location. Cryptocurrencies, on the other hand, are not securities and do not trade on a stock exchange.
• They trade on a global exchange, and different stock exchanges around the world each have their own trading hours, some of which may coincide with American weekends.
• It is possible for people to make trades on their ECN until 8:00 PM Eastern time on Friday if you consider the happy hour after work to be the beginning of the weekend.

What Is a Market Holiday for the Stock Market?

Any day that is not a weekend on which the bond, New York Stock Exchange, or Nasdaq markets are closed is referred to as a “market holiday.” That occasion is typically a holiday like Thanksgiving or Christmas Day.

The stock markets are open on some holidays and days that are close to them, but the bond markets are either closed or close early. 

The New York Stock Exchange and Nasdaq both closed their doors for a day of mourning in 2018 in memory of former President George H.W. Bush.

If a certain holiday falls on a Saturday, the preceding Friday usually becomes a stock market holiday. 

How Does Buying Stocks Over the Weekend Affect Things?

Retail investors can place orders to buy and sell stocks over the weekend on many modern trading platforms. These trades won’t actually go through, though, until the market opens next.

Due to the likelihood that the bid/ask gap will widen over the weekend, the market will open with a high spread and little liquidity, which poses a significant risk for both buyers and sellers.

Just for the info:

• The highest price a buyer will offer for a share of stock is called the bid price.
• The lowest price a seller will accept for a given stock is known as the asking price.
• Spread is the distinction between the asking price and the bid price. Low liquidity will result from a high spread, while perfect liquidity will come from having no spread.

Can the Stock Market Close Early?

Yes, Stock Market can close early one day before or one day after holidays like Thanksgiving and Christmas, etc. These are some special occasions, where stock markets make an exception and close early.

If we once again take NYSE as an example, it is normally open from 9:30 am to 4 pm EST, Monday through Friday. 

The day after Thanksgiving, Friday, Nov. 25, 2022, the stock market shuts early at 1 p.m. EST, according to the NYSE website. At 1:15 EST, “eligible options” will expire. 

Bond markets close at 2 p.m. EST.

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What If a Stock Market Holiday Occurs On a Weekend?

The stock market will close on the Friday before or Monday after a market holiday if it falls on a weekend. For instance, the NYSE will be closed on Monday, December 26 if December 25 falls on a Sunday in 2022.

The same happens for other holidays too, like Juneteenth, etc. 

Why Is Trading On Weekends Dangerous?

Trading over the weekend requires caution because more time for news digestion will lead to higher volatility, which has the potential to either cancel out a trade or reduce your profits.

Think about the following instance:

On a Saturday afternoon, a trader checks his account and notices that shares of Company A are now trading at $13, up from the $10 per share he invested at. 

He places a “market sell” order to sell all of his Company A shares because he wants to take advantage of this 30 percent gain. 

This implies that his asking price will be the $13 that the market is currently willing to pay for each share of Company A.

But that evening, information surfaces that the Company’s CEO has been stealing money. This immediately raises doubt about the company’s management, which lowers the stock price. 

By the time the market opens on Monday morning, $8 per share will be the highest bid received, which is 20% less than the trader’s initial investment.

Nevertheless, despite placing his order when he believed he would receive a 30 percent gain, the trader will sell all of his shares in Company A at a 20 percent loss because he used a “market sell” order.

US Stock Market Holidays for 2022

Holidays and weekends determine when the stock market closes, whether there is a bull market or a bear market. 

There are a total of 10 days in a calendar year when the stock markets are closed. The 2022 stock market holidays for NYSE are listed below, along with the days they fall on.

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Worldwide Stock Market Holidays

Canadian Stock Market

Ten holidays each year, including New Year’s Day, Family Day, Good Friday, Victoria Day, Canada Day, Civic Holiday, Labor Day, Thanksgiving, Christmas, and Boxing Day.

These are observed by the Toronto Stock Exchange, or TMX Group, headquartered in Toronto.

European Stock Market

The headquarters of Euronext is in Amsterdam. New Year’s Day, Good Friday, Easter Monday, Labor Day, Christmas, and Boxing Day are the six holidays it is closed on each year. 

On Christmas and New Year’s Eve, the hours of the Euronext exchange are also altered.

The headquarters of SIX Swiss Exchange is located in Zurich. 

Twelve holidays throughout the year—New Year’s Day, Good Friday, Easter Monday, Ascension Day, White Monday, Christmas Eve, Christmas, Boxing Day, and New Year’s Eve—are excluded from its operating days.

Eight holidays, including New Year’s Day, Good Friday, Easter Monday, an early May bank holiday, a spring bank holiday, a summer bank holiday, Christmas, and Boxing Day are observed by the London Stock Exchange Group

Asian Stock Market

The 22 holidays on which the Tokyo Stock Exchange closes are New Year’s Day, market holidays on January 2 and 3, Coming of Age Day, National Foundation Day, Emperor’s Birthday, Vernal Equinox, Showa Day, Constitution Memorial Day.

Also included are Greenery Day, Children’s Day, Marine Day, Mountain Day, Respect for the Elderly Day, Autumnal Equinox, Sports Day, Labor Thanksgiving Day, and a market holiday on December 31.

The Shanghai Stock Exchange, which is based in Shanghai, and the Shenzhen Stock Exchange, which is based in Shenzhen, both have 15 holidays each year that they are closed. 

These holidays include New Year’s Day, five days in February for the Spring Festival, Qingming Festival, Labor Day, Dragon Boat Festival, two days for the Mid-Autumn Festival, and four days in October for National Days.

The Hong Kong Stock Exchange, which has its headquarters in Hong Kong, also observes 17 public holidays annually, including New Year’s Day, three Lunar New Year’s Days, Qingming Festival, and Good Friday.

It also has Easter Monday, Labor Day, Dragon Boat Festival, Special Administrative Region Establishment Day, three National Days, and two days each for Christmas and New Year’s.

In India, the Bombay Stock Exchange, which has its headquarters in Mumbai, is open from 9:15 am to 3:30 pm (IST). 

Every year, it is closed for 14 holidays: Republic Day, Mahashrivati, Holi, Dr. Baba Saheb Ambedkar Jayanti, Good Friday, Ram Navami, Eid-Ul-Fitr, 

It is also Bakra Eid, Independence Day, Ganesh Chaturthi, Muharram, Mahatma Gandhi Jayanti, Dussehra, Diwali, Gurunanak Jayanti, and Christmas.

Can You Buy Stocks When the Market Is Closed?

Yes (technically). For example, you can place orders during the NYSE’s pre-opening session, which starts at 6:30 a.m. EST, and they will be held in a queue until the market opens at 9:30 a.m. EST.

The NYSE also provides after-hours trading, which closes at about 8 p.m. EST on a typical day. Technically, you can also trade on the weekends through foreign marketplaces where the time zones may let you make orders.

On the other hand, orders cannot be placed on days off or during the weekend when the stock market is closed.

Buying Advice for Weekend Stock Trading

There are dangers to making trades over the weekend. 

The spread can be reduced significantly if the trader places the order during market hours, allowing him to quickly turn a certain percentage of profit.

Since the markets are closed on the weekends, the spread may have time to grow, which might lead to a trading loss.

Having said that, there are a few best practices to keep in mind if you want to make trades over the weekend:

• You can buy or sell a position in stock “if and only if” you can trade a certain quantity at a certain price by placing limit orders. 
• Limit orders aid in “limiting” weekend volatility’s negative effects.
• Do not trade low-volume stocks; they are inherently more volatile than high-volume stocks, and this volatility is only heightened on weekends. 

Finding a buyer willing to take on your position may be difficult if you’re trying to sell 1,000 shares of a stock over the weekend that only has a 15,000 share average daily trading volume.

FAQs

Is the Stock Market Open On Columbus Day?

Yes. On October 10, 2022, which falls on a Monday, Columbus Day, the NYSE and Nasdaq are open.

Are the Bond Markets Open on Columbus Day? 

They are also closed on that day.

Is Veterans Day a Trading Day On the Stock market?

Bond dealers also get a day off for Veterans Day, which falls on Friday, November 11, 2022. However, regular business hours will continue at the NYSE and Nasdaq.

Is Trading Open on a Black Friday?

The day after Thanksgiving, on Black Friday, the stock markets close early at 1 p.m. In 2022, Black Friday falls on November 25. At 2 p.m., the bond markets close early.

Are Stock Markets Open the Night Before Christmas Eve?

The 23rd of December falls on a Friday in 2022. It will be completely open on the NYSE and Nasdaq. At 2:00 p.m., bond markets close.

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Conclusion

In the coming years, though, 24-hour trading will likely become a reality due to increased customer demand and technological advancements.

However, in my opinion, unless you are very knowledgeable, avoid buying and selling stocks after the stock market has closed. 

It’s not only riskier but also advisable to give yourself a break to recover and re-energize for the coming week.